Updated story: Solar power will help Holyoke Gas & Electric shave even more off commercial power rates. » Read the story.

HOLYOKE – Construction is set to begin within four weeks on a 4.5 megawatt solar power project in Holyoke.

The $18 million to $20 million project will put 18,400 U.S.-built solar panels on two sites. Three megawatts of generating capacity will be near Holyoke Gas & Electric’s gas vaporization plant on Muller Road in West Holyoke, said James M. Lavelle, general manager of the municipal utility. Another 1.5 megawatts of generating capacity will be built on a vacant lot on Berkshire Street in the Springdale section of Holyoke.

The project will be developed by Baltimore-based Constellation Energy so as to take advantage of state and federal tax breaks.

The panels will be installed by local contractors and will be up and running by the late summer of this year, Lavelle said.

The project was announced Wednesday morning.

This is a developing story. Additional details will be published on MassLive.com and in Thursday's edition of The Republican. The full press release sent to media outlets Tuesday evening is included below.

Solar Installation Will Help HG&E Maintain Competitive Energy Rates and Support Renewable Energy without Added Costs for Utility or Its 18,000 Customers

BALTIMORE and HOLYOKE, Mass., April, 13, 2011 – Holyoke Gas & Electric Department (HG&E) and Constellation Energy (NYSE: CEG) announced today the development of a new 4.5 megawatt solar installation which will generate electricity for the municipally owned utility’s 18,000 customers in Holyoke, Mass. The system, which is scheduled for commercial operation in summer 2011, will be among the largest solar installations in the New England region and the largest in western Massachusetts.

Constellation Energy will build, own and maintain the system, and HG&E will purchase all of the electricity generated from the solar panels under a 20-year power purchase agreement at a fixed cost that is less than projected market rates.

“HG&E is committed to continuing to provide our customers with cost-competitive and clean electricity,” said James M. Lavelle, manager, Holyoke Gas & Electric. “HG&E currently offers its customers some of the lowest retail electric rates available in the Commonwealth and has a carbon footprint that is 25 percent of the average New England utility. Through this solar power purchase agreement with Constellation Energy, we are able to ensure affordability and price stability for our customers, and promote Holyoke as a more attractive location for new and existing industry, with no upfront capital expenditure. And, we’re partnering with an energy company that has the financial backing and experience to design and construct a system that is best suited for our needs.”

“Efforts such as this new 4.5 megawatt solar project are crucial to reaching Governor Patrick’s goal for installation of 250 megawatts of solar power in Massachusetts by 2017,” said Energy and Environmental Affairs Secretary Richard K. Sullivan Jr. “Congratulations to Holyoke Gas & Electric for showing the kind of leadership that will help the Commonwealth realize a clean energy future.”

“Large-scale solar generation is an attractive option for municipal utilities to manage volatile energy costs for their customers and meet renewable energy goals,” said Michael D. Smith, senior vice president of green initiatives for Constellation Energy’s retail business. “In states like Massachusetts with strong market-based incentive programs, Constellation can provide solar power to municipal utilities at a rate that is significantly less than electricity from other generation sources, which benefits both the environment and power customers’ bottom lines.”

HG&E’s solar power system will be comprised of 18,400 SolarWorld photovoltaic ground-mounted panels at two locations and is expected to produce nearly 5,500,000 kilowatt-hours of electricity each year. Generating the same amount of electricity using non-renewable sources would result in the release of 3,950 metric tons of carbon dioxide or the equivalent emissions from 755 passenger vehicles annually.

Constellation Energy currently owns and operates approximately 60 megawatts of solar installations that have been completed or are under construction throughout the United States. Commercial customers, universities, school systems, hospitals and government agencies interested in on-site solar installations of 1 megawatt or larger may contact Constellation Energy at sustainablesolutions@constellation.com or 1-877-427-2005.

Constellation Energy (www.constellation.com) is a leading competitive supplier of power, natural gas and energy products and services for homes and businesses across the continental United States. It owns a diversified fleet of generating units, totaling approximately 12,000 megawatts of generating capacity, and is a leading advocate for clean, environmentally sustainable energy sources, such as solar power and nuclear energy. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $14.3 billion in 2010.

About Holyoke Gas & Electric Department

Formed in 1902, HG&E (www.hged.com) is a municipally owned utility that provides electricity, natural gas, and fiber optic internet services to over 18,000 customers.